Design of a Product or Service Prototype

Increase of commuting is a desirable goal and has policy support (Bailey, 2007). Apart from these reasons like congestion on the roads, savings in commuting time would be seen as the chief reasons for a commuter to prefer public transport over using own cars. Typically a product or a service that gives enhanced value for a customer would what make a customer switch to a service or a product. There is a big opportunity here for bus operators to create this critical additional value through the use of ICT to induce commuters to switch over in a big way to use public transport like buses.
This proposal is about creating a viable and profitable business model built through 2 products, the "Bus Catcher" and the "Bus bug" and software, all of which will provide an enhanced service offering to commuters.
Bailey (2004) estimates that for a US population of 7.2 million non-drivers, 50% 0f which is people above the age of 654, public transportation is the only alternative when they are going somewhere outside their immediate neighbourhood. She also observes most U.S. residents still do not have the option of using public transportation to get places. Basing her observation on the American Housing survey of 2001, she says that just half – 49 per cent – of all Americans reported that they have no public transportation service.&nbsp.
Till very recently she says that a quarter of rural counties had below average public transportation service, and 41 per cent had none at all. The gap between the need and what is available is high.
The demand for public transport is, however, growing at a tremendous pace since the mid-nineties. Reasons like surging oil price, congestion, commuting time are the reasons. Pucher (2002 says that ridership is up 25.1 per cent since 1995, because of the awareness among the users that use of public transport saves money. Reducing commuting is seen to be the chief consideration for people to switch over to public transport. Another study indicates that demand will come further as people move away further and further away from their workplace. (Howlett, 2008). This report says that people are willing to commute for over 90 minutes each way and an estimated 3.4 million Americans already are doing this and their numbers will be growing.
Americans took 10.3 billion trips on public transportation in 2007, the highest level in 50 years, representing a 2.1% increase over the previous year, according to data released by the American Public Transportation Association (APTA). It is estimated to have grown by 32% since 1995. (Green Car Congress, 2008). Though bus service, at 1% was lower than the overall increase, it had a much bigger growth in places with a population less than 100,000 and more than 5% in select urban areas.
Even though the budget estimated to improve public transport is 50% of what would be needed, Federal funding has been increasing annually at the rate of 2.1 % since 2001(Bailey 2007)
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